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January 10, 2021

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CFPB Sues United Holding Group, Its Affiliates, And Its Owners For Illegal Debt Collection Practices

The Debt Collection Company and Its Owners Knowingly Used Third-Party Collectors that Engaged in Unlawful and Deceptive Tactics

Washington, D.C. —The Consumer Financial Protection Bureau (CFPB) today sued United Debt Holding (UDH), JTM Capital Management (JTM), United Holding Group (UHG), and their owners, Craig Manseth, Jacob Adamo, and Darren Turco, for illegal debt-collection practices. The Bureau alleges that the defendants placed consumer debt with, or sold consumer debt to, collection companies that used unlawful and deceptive collection tactics. The defendants knew, or should have known, the collection companies made false threats and false statements to consumers. And although some of the defendants have been the subject of prior enforcement action, they continued their unlawful practices.

“This debt collection ring and its operators created the conditions for rampant abuse,” said CFPB Director Rohit Chopra. “Companies cannot profit and evade liability simply by creating a maze of shape-shifting entities and enabling third parties to take advantage of consumers.”

UHG, headquartered in Williamsville, New York, was founded by Manseth, Adamo, and Turco in May 2017. Before co-founding UHG, Manseth owned UDH, Turco worked at UDH as a manager, and Adamo owned JTM. All three companies are debt collectors that buy debt portfolios from creditors, or other debt sellers, and then place the portfolios with or sell them to other collection companies. From September 2017 through April of 2020, the defendants collectively placed debts with a face value of more than $8 billion. The three individuals formed UHG, and UHG then managed ongoing business for UDH and JTM. The CFPB alleges all three companies allowed third-party collection companies to deceive consumers and placed or sold debt portfolios to collection companies engaged in unlawful behavior.

The defendants allegedly harmed consumers by:

• Allowing third parties to deceive consumers: UHG, UDH, and JTM and their owners were aware some of their third-party collection companies were deceiving consumers through false and misleading statements. The defendants received hundreds of complaints that their collection companies were threatening arrest, jail, or lawsuits if consumers did not pay their debts imminently. The defendants also received recorded phone calls in which some of their third-party collection companies falsely threatened suits or made false statements about credit reporting. The defendants continued to place debt with and sell debt to these companies, allowing them to continue to collect on consumer debt after receiving evidence of their violations. As a result, some of the third-party companies continued making false threats and misleading statements for years when collecting on debt they received from the defendants.

• Placing debt with and selling debt to collection companies engaged in unlawful behavior: UHG, UDH, and JTM and their owners substantially assisted third-party collection companies engaged in deceptive conduct. The defendants knew or should have known the third-party debt collection companies were making false statements to consumers. For example, from 2015 through January 2017, UDH’s compliance staff reviewed recorded phone calls from JTM’s collection companies and found that many contained major violations of federal law. Instead of terminating its relationship with JTM, UDH increased the amount of business it sent to JTM. By 2017, UDH was using JTM almost exclusively for debt placements despite objections by UDH’s compliance manager.

Enforcement Action

Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the CFPB has the authority to take action against institutions violating consumer financial laws, including engaging in deceptive acts or practices or violating the Fair Debt Collection Practices Act, which prohibits abusive, deceptive, and unfair debt collection practices. The CFPB is seeking monetary relief for consumers, disgorgement of unjust gains, injunctive relief, and a civil money penalty.

The complaint is not a final finding or ruling that the defendants have violated the law.

Read today’s filed complaint.

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The Consumer Financial Protection Bureau is a 21st century agency that implements and enforces Federal consumer financial law and ensures that markets for consumer financial products are fair, transparent, and competitive. For more information, visit consumerfinance.gov